UK Oil & Gas Regulatory News (UKOG)

13 October 2010

Sarantel Group PLC

Outsourced manufacturing contract

Sarantel Group PLC, (AIM: SLG, "Sarantel"), a leading manufacturer of high-performance, miniature antennas for mobile and wireless devices, announces that further to its announcement of 2 June, the Group has now signed an agreement to outsource its assembly test and supply chain processes to Elcoteq SE, based in Tallinn, Estonia.

The agreement is expected to achieve annual production savings of approximately £0.5m, with further savings possible through improvements in the manufacturing process itself. Production is expected to begin at Elcoteq in November and the Group will consolidate its UK operations from two sites to one, with an exceptional restructuring cost of approximately £50,000.

Outsourcing allows the Group to focus more effectively on its uniquely valuable three dimensional photolithographic processes and increase resources for product development. At the same time, it will simplify day-to-day operations by reducing the number of direct suppliers to the Group's remaining operations.

Sarantel will benefit from Elcoteq's buying power to reduce BOM (bill-of-material) costs and from its design-for-manufacturing experience, which will optimise and reduce the cost of the assembly process itself. Elcoteq provides Sarantel with a respected manufacturing partner that has already helped it to gain visibility with prospective customers.

David Wither, CEO of Sarantel, said

"This is an important milestone in the development of Sarantel's technology. Over the past few years we have significantly improved the manufacturing process for our antennas and by outsourcing the straightforward parts of the process we will benefit from Elcoteq's expertise, capacity and buying power.

"We are confident this relationship will open new doors for our technology at a time when interest in our antennas is increasing rapidly."

Tomi Saario, SVP, New Sales and Business Development at Elcoteq, said

"Elcoteq looks forward to helping Sarantel move its technology to the next development stage and we are confident that we can deploy our considerable experience in high volume, low cost manufacture to help make their technology more cost effective and scalable."

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About Sarantel www.sarantel.com

Sarantel is a leader in the design of high-performance miniature antennas for portable wireless applications. Sarantel's revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body. Because of their smaller size and higher capabilities, Sarantel's antennas enable manufacturers to create innovative wireless products for the GPS, WiMax, Satellite Radio and Satellite phone markets.